BILL NUMBER: S6552

SPONSOR: SKOUFIS
 
TITLE OF BILL:  An act to amend the civil practice law and rules, in
relation to permitting a plaintiff to recover against a third party
defendant in certain cases

 
PURPOSE OF BILL:

This bill would add a new Section 1405 to the Civil Practice Law and
Rules (CPLR) to expressly permit a plaintiff, as judgment credit or
against defendant, to recover and collect an unsatisfied judgment or
portion of a judgment directly against a third-party defendant found
liable for contribution or indemnification.

 
SUMMARY OF PROVISIONS OF BILL:

Section 1: Adds a new Section 1405 to the CPLR to permit a plaintiff to
recover and collect an unsatisfied judgment or a portion of a judgment
against a third-party defendant or co-defendant, when a plaintiff has
entered judgment against a defendant which is unsatisfied thirty days
              

after service on the defendant-judgment debtor, and where judgment has
been entered in favor of the defendant-judgment debtor against a co-de-
fendant or third-party defendant on a cause of action for contribution
or indemnification. Under certain circumstances where the plaintiffs
judgment remains unsatisfied thirty days after it has been served on the
defendant-judgment debtor, and where the defendant-judgment debtor has a
cause of action for contribution or indemnification which has not been
reduced to judgment, then the plaintiff-judgment creditor may attach, or
take an assignment from the defendant judgment debtor of the cause of
action for contribution or indemnification and prosecute the action in
the plaintiffs own name or in the name of the defendant judgment debtor.
Direct recovery, however, is not authorized against a third-party
defendant in those circumstances in which the third-party claim would
have been barred by Section 11 of the Worker's Compensation Law.
Protects the ability of a plaintiff-judgement creditor to enforce their
rights against a third-party pursuant to this legislation by preserving
the ability for plaintiff-judgement creditor to pursue a judgement or
cause of action against a third party even if such claim or cause of
action is extinguished in the bankruptcy of a defendant-judgement
debtor.

Section 2: This shall take effect immediately, and shall apply to all
unexpired judgements that have not been fully satisfied as of the date
of enactment.

 
EXISTING LAW:

Section 1401 of the CPLR provides, with certain exceptions under the
General Obligations Law and the Workers' Compensation Law, that two or
more persons who are subject to liability for damages for the same
personal injury, injury to property or wrongful death, may claim
contribution among them whether or not an action has been brought or a
judgment has been rendered against the person from whom contribution is
sought. Section 1403 of the CPLR provides that a cause of action for
contribution may be asserted in a separate action or by cross-claim,
counter-claim or third-party claim in a pending action.

 
JUSTIFICATION:
A plaintiff's recovery of a judgment that ultimately comes from a third
party defendant should not depend on the fortuity of the solvency of the
defendant/third party plaintiff. Accordingly, this measure would allow a
plaintiff to recover on a judgment for contribution or indemnification
directly against the third-party defendant, whether or not the
defendant/third party plaintiff has satisfied the underlying judgment
for which contribution or indemnification is sought. Thus, in the case
where a defendant/third party plaintiff is insolvent and is unable to
pay the judgment to the plaintiff: the plaintiff could still seek to
recover directly that portion of the judgment, as determined by the
principles of contribution and indemnification, owed by the third party
defendant to the defendant/third party plaintiff. This bill also seeks
to protect the ability of an injured plaintiff to collect a judgement in
the event a defendant-judgement debtor's cause of action or judgement
against a 3rd party wrongdoer is extinguished in bankruptcy, leaving the
plaintiff with no remedy to collect their judgment.

This measure would not alter in any way the substantive law of the Work-
ers' Compensation. The 1996 Omnibus Worker's Compensation Reform Act
already limits claims for contribution and indemnification against an
employer to only those cases involving "grave injuries."  In cases where
there are not grave injuries the employer is not liable as a matter of
substantive law, and therefore this measure would not affect such
employees at all.

 
LEGISLATIVE HISTORY:

2017-2018-A.9031
2015-2016-S.563/A.251;
2013-2014- S.555A/A.1002A;
2011-2012-S.3761/A.630;
2009-2010-S.2392/A.2576;
2007-2008-S.2065/A.6310;
2005=2006-S.7487/A.11076;
2003-2004-S.5006/A.7493;

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
This Act will take effect immediately, and shall apply to all unexpired
judgments that have not been fully satisfied as of the date of enact-
ment.